Technical analysis: key levels for gold and crude

Gold’s rally from the Friday lows has run out of steam, while oil remains becalmed in the middle of its recent range. 

Oil barrels
Source: Bloomberg

Gold could test $1174

Gold bears were afforded an excellent chance to short the metal, as the Friday rally hit $1195 and then fell back again.

This kind of price action would seem to indicate that a test of $1174 and then $1157 is likely, assuming that the sellers can break Friday’s low at $1180. Buyers need to push the price back above $1195 to indicate that a rally is at hand.

WTI awaits breakout from range

The end of last week saw the $54 resistance hold once again, so it looks like we are due a move to $52.80 and then down to $52. For the time being the $52-$54 range continues to hold, so we have a clear set of levels against which to trade.

We will need to see a breakout from one of these for a new direction to establish itself for WTI.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.